'If somebody picks up their life and moves it… it's likely going to increase the notice period'
“Be mindful when you're engaging in recruitment - if you’re making significant promises to somebody to entice them away from secure employment, it could enhance the notice period.”
So says Laura Dunnigan, a labour and employment lawyer at Mathews, Dinsdale and Clark in Calgary, after an Alberta court awarded a worker more than $75,000 in damages following a breach of contract by her former employer involving unpaid wages, lack of termination notice, inducement of the worker to move across the country, and bad-faith conduct.
During the pandemic, the Alberta healthcare system was short-staffed, forcing Alberta Health Services (AHS) to find medical staff to fill the province’s healthcare needs. As a result, it contracted with companies such as Northern Nursing Solutions (NNS) - an agency employing medical professionals and matching them with clinics or hospitals needing medical and nursing assistance - to provide medical staff at facilities across the province.
The 50-year-old worker was a licensed practical nurse (LPN) living in Moncton, NB, when the pandemic hit. She had a secure job at a healthcare facility in Moncton when NNS came calling in October 2021, offering her a position in Westlock, Alta., as a travelling LPN stationed at the Westlock Health Care Centre.
NNS offered a significant compensation package and financial stability, so the worker decided to move to Alberta with her husband, leaving behind two adult daughters.
The worker signed a “master employment agreement” dated Oct. 7 indicating that the worker would be an NNS employee who was entitled to group health and dental benefits, she would be reimbursed $2,000 per month for living and utilities expenses, and she was to submit her hours through weekly invoices. NNS would pay the worker every two weeks.
Unpaid wages
The worker provided LPN services in Westlock without incident until August 2023, when NNS stopped paying her regularly. Some of her invoices were only partially paid, while others weren’t paid at all.
The worker tried to contact NNS to find out why she wasn’t getting fully paid, but the company didn’t address her concerns over the next few months. Eventually, the worker raised the issue with AHS, hoping that the government agency would step in once it learned that its contractor wasn’t paying an employee.
On Dec. 1, NNS gave the worker a written notice of termination effective Dec. 31. The company stated in the notice that it would pay her and she should submit her invoices promptly. However, by the time Dec. 31 arrived, the worker hadn’t received anything and was still owed about $30,000 in outstanding wages.
The worker was hired quickly by AHS directly to work part-time at the Westlock Health Care Centre, although AHS didn’t provide her an accommodation allowance similar to what she received while employed with NNS. NNS paid part of her outstanding wages in January and February 2024, leaving just over $14,000 owed.
The worker sued NNS for breach of contract, claiming $100,000 in damages. NNS didn’t file a defence.
Financial, emotional distress
The court noted that the worker faced significant financial and emotional hardship due to NNS's actions. Although the worker was rehired on a part-time basis by AHS, her financial situation worsened due to the loss of benefits and allowances, said the court.
The court considered the standard factors to determine the appropriate notice period, including the nature of employment, length of service, and the impact of COVID-19 on finding comparable work. It also noted that the worker had been induced to leave secure employment and relocate far from her family for the position with NNS, which justified an increased notice period.
“When you hire someone and you engage in the kind of inducement, where you make promises to somebody who’s in a specialized industry, you seek them out and offer them a good salary and accommodation and travel allowances, and in exchange for that they move across the country, you're going to be in hot water already,” says Dunnigan. “No reasonable person would move across the country away from even their adult children without some sort of promise of long-term and secure employment.”
The court determined that the worker was entitled to a longer notice period - six months - for her two years of service due to the difficult job market during the pandemic and the significant inducement to join NNS.
The court also found that NNS acted in bad faith by failing to pay the worker wages owed and misleading her into believing that submitting invoices would result in payment. The worker’s “extreme anxiety” from the company’s non-payment or delay of payment, and the financial difficulty it caused, would have been contemplated at the time the employment agreement was signed because of the worker’s situation, said the court in finding that the worker was entitled to aggravated damages for NNS’s breach of its duty of good faith in its contractual performance.
Bad-faith breach of contract
Failing to pay the worker’s wages was a fundamental breach of the employment contract, says Dunnigan.
“In cases where employers have stopped paying somebody their wages, there have been aggravated damages found in those circumstances, so it’s not surprising in this case,” she says. “But it went even further – [NNS] had spotty communication with the worker, but when it did communicate it promised that it would pay her, and it didn't - the next communication that the worker received was a termination notice, which is quite cold and callous.”
The court concluded that $30,000 in aggravated damages were appropriate to reflect the financial and emotional harm caused by the company’s conduct. Punitive damages weren’t necessary as the compensatory damages were sufficient to accomplish the objectives of deterrence and denunciation of NNS’s conduct, the court said.
In total, the court determined that the worker was entitled to $78,000 for damages for six months’ notice – including salary, benefits, and living expenses - $14,388 for unpaid wages, and $30,000 in aggravated damages plus costs. With the amount the worker earned in her new position was subtracted, NNS was ordered to pay $75,231.51.
Inducement big factor
Inducement can sometimes be hard to make out, but in this case it was a significant factor in the notice entitlement, according to Dunnigan.
“Where somebody has been offered certain compensation that’s attractive in such a manner that they’re prepared to sell their home, leave a secure, long-term job, maybe even leave family and friends behind, and move to a fairly remote place, it’s a pretty clear-cut case of inducement,” she says. “You don't get that very often, but if somebody picks up their life and moves it when they have secure employment, if that opportunity doesn't pay out, it's likely going to increase the notice period.”
However, for employers actively recruiting workers in such circumstances, the risk can be reduced with a properly drafted termination provision in the employment agreement, says Dunnigan.
“Maybe you want to have a signing bonus that compensates them for that kind of move, and then you can have a negotiated termination provision that limits entitlements on termination without cause,” she says.
“Also, the longer somebody is employed, the less likely inducement is to be a factor - if somebody's been there for four or five years, you're less likely to have inducement play a big role in the extension of the notice period.”
See Rosenberg v. Northern Nursing Solutions Inc., 2024 ABCJ 220.
